Muhammad Yunus

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The Social Business and Microeconomic Opportunities for Youth Conference was an amazing success. Some are calling it a life-changing event! “This has been the best conference on microcredit I have been to in 18 years. It’s a truly historic conference that will be a great accelerator of the movement to end poverty!” - John Hatch, Founder of FINCA

I was privileged to be one of the organizers of this remarkable event - one of the “Friends of Microcredit”, an informal group of eight individuals representing organizations involved with microcredit in Colorado or elsewhere in the world. For about four months of breakdowns and breakthroughs, we produced a 2 1/2 day major national conference - the first in the world on Muhammad Yunus’ idea of Social Business as introduced in his landmark new book, Creating a World Without Poverty: Social Business and the Future of Capitalism.

Over 500 people travelled from all over the U.S to attend the conference, and over 50 speakers contributed their wisdom, the Governor and First Lady of Colorado and the Mayor of Denver participated. We got some great press.

I am attaching the flyer from the conference, a brilliant paper by John Hatch, and a copy of last Friday's major article on the front page of the business section of the Denver Post.

At the conference, Muhammad Yunus brilliantly put forth the case for a new version of capitalism that recognizes the complexity of human motivation, not just monetary motivation. He is calling this new form "Social Business" - a non-gain, non-loss for-profit business where profits are recycled in the business and the primary purpose is to do good in the world.

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Muhammad Yunnus’ book Banker to the Poor opened my mind to a new type of philanthropy – venture philanthropy – where donations to a Microfinance Institution are loaned out, repaid at an extremely high rate, and then reinvested. The thought that my small donation not only made a significant impact to the loan recipient but also was recycled appealed greatly to my entrepreneurial bent. After all, I wanted my hard-earned cash to be well-spent.

Now the Nobel Laureate has written a new book – Creating a World Without Poverty – which I hope will open the minds of business people around the world as his first book had done for me.

In the United States particularly, we have come to assume that a business’ mission must be to “maximize shareholder value”. Yunus defines these as PMBs, or Profit-Maximizing Businesses. In his new book, he shows us there can be another way, “Social Businesses” which are “cause-driven” instead of profit-driven.

This concept may be seen as radical, or even heretical, because it conflicts with our US point-of-view favoring free market capitalism. In a Stanford VTSS (Values, Technology, Science and Society) class, I learned that changing society’s values is perhaps the hardest and slowest thing of all, often lagging science and technology advancements by 10 or more years. We cling to our values and customs, not necessarily because they are right or the best, but because we are afraid of change; we are comfortable with the status quo.

However, in China, this concept of Social Business is not so radical because the relics of the Communist infrastructure, the State-Owned Enterprises (SOEs), are similar in result, though not in purpose. In other words, SOEs were not created for a socially-minded cause, but they were one of the last social safety nets, the “iron rice bowl.” But due to foreign competitive pressures from China joining the WTO (World Trade Organization), these inefficient dinosaurs are being dismantled and/or restructured, causing millions of workers to be laid off. Currently, China has an estimated 220-300 million people under the poverty line. The poor people are a powerful destabilizing force, and thus the Chinese government strongly supports, and sometimes even demands, businesses to accept social responsibility.

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At Federated Church, United Church of Christ, in Chagrin Falls, Ohio, we brought a biblical parable to life this past fall. We lived out the parable of the talents in Matthew 25:14-30. There, a master lends three servants varying amounts of money. Two of them invest their money and double it. One simply buries it and makes nothing. The master is thrilled with the investment of the first two and commends them for it.

We lent everyone in the church $50 and invited them to invest that money in some way and to make more with it. Someone bought hens and sold eggs. Another person offered rides on his Harley-Davidson and asked for donations. Still another recorded a song she’d written and sold CDs of it.

For us, the parable became an opportunity to encourage the various gifts with which we’ve all been blessed. Not everyone is LeBron James or Beyonce. We’ve all been endowed with particular gifts and abilities, though, and we’ve been invited to use those gifts to make a difference in the world.

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Aha!Finally!I have been running Social Businesses for many years (though I did not use the term up until now), so it is delightful to have Professor Yunus not only give it a name, but shine a bright light on such a valuable free-market approach to addressing social change!

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When he asked for a meeting with Nobel Laureate Muhammad Yunus, Franck Riboud, CEO of Group Danone, a global corporate giant (whose American brand name is Dannon), didn't realize that his concept of doing business was about to change forever. A few hours and a hand shake transformed the hard driving, profit-motivated executive, into an unwavering advocate of 'social businesses'. Barely a year later, Riboud joined Professor Yunus in Bangladesh to launch Grameen Danone, with the mission of producing and selling specially-fortified yogurt to improve the health of poor Bangladeshi children.